How the town square development will look

The scheme, which will take about eight months, involves the creation of a formal square in front of the Borough Hall and a "history garden".

The initial work will include demolishing existing toilet blocks and the Middlegate bus waiting area.

Archaeologists who visited the site earlier this year are to carry out further studies and excavations.

The project is being backed by North Hartlepool Partnership (NHP) and Hartlepool Council, with cash coming from regeneration agency One NorthEast.

Extra support

The work has been able to start after bus operator Stagecoach Hartlepool withdrew its formal objection to the removal of the bus waiting area in return for a pledge from NHP to review the options for the location of the waiting area.

Hartlepool Council has also agreed to give the project extra support by meeting a �105,000 funding shortfall.

NHP chairman John Marshall said: "It's been a long road, but I am sure that it will be worth the effort that everyone has put in."

Paul Livesey, operations manager of Stagecoach Hartlepool, said: "We are very pleased that, following discussions with the North Hartlepool Partnership and the Council, we have been able to withdraw our objection to the removal of the bus waiting area at the bottom of Middlegate.

"We wish the town square project every success and we look forward to its completion."

The town square project has been designed by urban design firm Ferguson McIlveen, which has offices in Middlesbrough.